611.2531/227
The Chargé in Chile (Frost) to the Secretary of State
[Received November 29.]
Sir: Referring to the Department’s telegraphic Instruction No. 52 of November 19, 6 p.m., and to the Embassy’s reply No. 80 of November 22, 7 p.m., I have the honor to request that if the Department sees fit the Embassy be furnished, as soon as practicable, with guidance respecting the various subjects to be included on the one hand in a commercial accord under the Trade Agreements Act, and on the other hand in a general treaty of friendship, commerce and navigation. At the present moment the prospects appear to be that a modus vivendi between Chile and the United States will be concluded within the next few days, including an undertaking to negotiate a general treaty immediately and also based upon collateral assurances that the Department is prepared to explore the possibilities of entering into negotiations for a reciprocal trade agreement.
In studying and discussing a broad economic settlement between Chile and the United States, the officers of the Embassy have had in mind a trade agreement along the general lines of the Brazilian-American agreement signed on February 2, 1935,42 although the more recent agreements of this type concluded by the United States have also been examined. These agreements contain unconditional most-favored-nation clauses with respect to tariff rates and regulations, and also include clauses respecting exchange treatment. It is noted, however, that the treaty of friendship, commerce and navigation between the United States and Finland,43 which is understood to be based upon an outline deemed desirable for future treaties in this category, includes treatment of the unconditional most-favored-nation principle.
[Page 420]If the modus vivendi between Chile and the United States is signed within the next few days, the Chilean Foreign Office will probably be desirous of proceeding at once to explore the possibilities of entering into negotiations for a reciprocal trade agreement. The Embassy, as the Department is aware, also believes that the conditions are more favorable for this purpose at the present time than they are likely to be when the international metal prices shall have reduced Chilean exchange availabilities, probably by the middle of 1938, and when the presidential campaign in Chile shall have rendered the internal political situation here even less normal than at present. If tentative conversations in respect to the trade agreement are opened, accordingly, in order not to lose the impetus already gained and the favorable atmosphere still prevailing, it will be advantageous to have a definite idea as to what subjects may be incorporated in such an agreement.
The Chilean Government has not previously shown any especial desire for a treaty of friendship, commerce and navigation, and has accepted the Department’s pledge in the modus vivendi with regard to such a treaty to some extent for the sake of appearances. On the other hand, it possesses a genuine and rather earnest desire to bring about the conclusion of a trade agreement at an early date. It is therefore my impression that the negotiations with regard to the trade agreement should be given precedence, and that the matters to be included in it should be as numerous as possible. The trade agreement, presumably, cannot be completed until understandings have been reached with regard to the unconditional most-favored-nation principle, the question of contiguous countries, and the exchange situation. Since these subjects must be dealt with before the trade agreement can be signed, it would seem well to negotiate with respect to them in the agreement itself; after which they can be either repeated in a treaty of friendship, commerce and navigation, or omitted from it. In any event the negotiation of the treaty of friendship, commerce and navigation will be a relatively simple matter once these subjects shall have been disposed of, although there will naturally arise points of divergence which may involve long delays and discussions.
The Embassy would therefore greatly appreciate an indication from the Department as to whether the exploratory conversations, either at Washington or at Santiago, with reference to the trade agreement should deal with the three points above mentioned, and as to what other general subjects such conversations are to include. As indicated, my view would be that the trade agreement should be discussed upon as comprehensive a basis as possible, with the expectation that the treaty of friendship, commerce and navigation would then be dealt with on a relatively less pressing basis.
Respectfully yours,
- Department of State Executive Agreement Series No. 82, or 49 Stat. 3808; see also Foreign Relations, 1935, vol. iv, pp. 300 ff.↩
- Signed February 13, 1934, Department of State Treaty Series No. 868, or 49 Stat. 2659.↩